Shake Shack Details Plans for Future Growth
Shake Shack Inc. wrapped up a “tremendous year of growth” and is planning for future expansion in 2019.
“2018 was by far our most ambitious year yet,” Randy Garutti, Chief Executive Officer, said during an earnings call with analysts. “…We opened a record number of Shacks and drove strong revenue and profits while continuing to build the foundation for sustainable long-term growth ahead."
The company opened 49 restaurants in 27 states and 13 countries. For the year, total revenue increased 28% to $459.3 million while sales increased 28.6% to $445.6 million. For Q4 and FY18, same store sales increased 2.3% and 1%, respectively.
The company recently hired Jay Livingston as the brand’s first CMO and Dave Harris as CIO. Garutti said the brand “is building a digital toolbox that allows us to connect and engage with our guests like never before.”
Count the Ways
Two years ago, the only way to get a Shack Burger was to stand in line, order with a cashier and wait for the buzzer to tell you when your order was ready, Garutti recounts. These days, there are five ways to order: in person, using a self-serve kiosk, using the mobile app, the Web ordering platform or via one of its third-party delivery partners.
The brand is piloting multiple delivery services but is not disclosing sales at this time. “We’re not going to quantify that just yet other than saying digital channels in total, which include delivery, continue to increase and continue to show higher-than-average check,” Garutti explained. “…For the most part, we’re very happy with the guest demand for delivery.”
Adding additional channels adds to the “operational complexity” of the locations.
“… All this change in digital innovation isn’t always easy,” said Garutti. “…We’re continuing to review to evolve our kitchens, our order pickup areas, our packaging to ensure a great Shack experience in an omni-channel world.”
To support future growth, the company continues to invest in its staff, its guest experience and in its underlying technology, said Tara Comonte, Chief Finanical Officer.
One sizeable tech investment is its enterprise system upgrade referred to as Project Concrete. The upgrade, which includes financials, HR, procurement and inventory, “is progressing well,” she said. “We’re in the midst of development and implementation work, and we’re on track for multiple key modules going live during the third and fourth quarters.”
At Shake Shack, change is constant. “That’s always been a core part of our culture at Shake Shack,” said Garutti. “We continue to embrace the challenge of constant innovation as a key part of how we successfully grow our business,” said Garutti.